Citadel Securities pegs AI chip debt binge at $500B by 2028

A single analyst call from a market maker rarely reshapes how you think about a credit index, but Citadel Securities' newest forecast is worth sitting with. Bloomberg reported that the firm expects more than $500 billion of new debt to hit public and private markets by 2028, all of it earmarked to buy the chips that power AI campuses. That figure, according to head investment-grade desk analyst Jeff Eason, would equal more than 5% of the Bloomberg US high-grade index by 2028.

Why this matters if you don't trade credit for a living: the shape of the issuance is unusual. Eason expects most of it to be shorter dated, around three to five years, matched to the useful life of the chips themselves, and a chunk placed as 144A private offerings rather than fully public deals. In effect the debt is being sized to the depreciation curve of the hardware, a different animal from the long-dated paper that funds most classic industrial issuers. Eason called it 'one of the largest new sectors' in investment-grade credit, adding that 'the scale is unprecedented relative to today's market.'

The context helps. Global markets have already absorbed roughly $570 billion in AI-related debt, most of it from hyperscalers like Amazon, Microsoft and Google, and the US alone has taken on about $60 billion of short-term hyperscaler debt since last year. The chip financing wave sits on top of that, and Eason estimates chip-makers alone could issue $250 billion in 2028.

The honest caveat is that this is one desk's forecast, not a settled path. Eason himself warned that 'investors have not yet absorbed financing of this magnitude,' which is another way of saying nobody knows how the buy side digests it, or what happens if chip cycles shorten and the collateral behind three-to-five-year paper looks obsolete faster than expected. The reporting also does not spell out which specific issuers Citadel expects to lead, or how the new supply reprices existing technology, media and telecom exposure.

What is worth watching is the structural point. If the forecast is anywhere close to right, chip financing stops being a sub-theme within tech credit and becomes its own book, with its own duration profile and its own dedicated buyers. Underwriters positioned early, Citadel among them, get a seat at the table for a corner of the market that barely existed a couple of years ago.